China and the World of Business • China Business and the World

An article in this weeks BusinessWeek recounts yet another embarrassment in corporate governance, the independent board report on Conrad Black’s reign at Hollinger International apparently was allowed by a weak board to do bad things for too long. Where will the next spate of revelations come from?

I nominate Redmond, WA.

So, on the one hand, we’ve got Microsoft Chairman and Chief Software Architect William H. Gates III telling the world that Apple doesn’t know what it is doing about digital media.

Meanwhile, Microsoft’s third major downgrade of Longhorn (an operating system that was originally supposed to add the kinds of advanced features that users of Mac OSX and indeed desktop distros of Linux) enjoy – in as many months has Mr. Softy’s spin-doctors working overtime explaining to the world that this is no big deal – such a painfully obvious untruth that even mainstream publications like BusinessWeek aren’t buying it. Industry wags are beginning to call the Microsoft’s Great Vaporware “Shorthorn.”

In what can only be called an incredibly lame apology, Greg Sullivan, a lead product manager in the Window’s client division at MS, told the Economist it was because its programmers were busy patching up Windows XP, thus producing the now globally famous Service Pack 2, which has turned out to be as much disease as cure.

BusinessWeek correctly points out that there is something seriously wrong at Microsoft R&D. Certainly, this would seem to be the case. But the entire fiasco begs three much larger, far more troubling questions about Microsoft.

1. What In The Name of All That Is Holy is Bill Gates Thinking? Why is the company focusing so much on trying to create an online music service and leading a PR war on iTunes while its core business (and a much bigger profit machine than music could ever be) is rotting on the vine in the next room? And did we mention that the service, after having all this time to look at iTunes and do it one better, has half the songs, a frustrating purchase/download process, and doesn’t support purchases from other sources? Again hopeful MS customers are left to pray for the future .

2. Why is a company that is hardly resourced constrained claiming resources as its primary constraint? That Microsoft, the richest company in the world (with the possible exception of Warren Buffet’s Berkshire Hathaway, a company that has refused to invest in Microsoft), is unable to deliver its promises – to execute credibly on its most critical product line, would rather send its shareholders a $26 billion care package than invest resources in expanding its OS development team, is unconscionable. I know good programmers don’t grow on trees, but it’s time Microsoft started recognizing that it needs to start narrowing its margins sufficiently to improve its execution. Recognizing, indeed, and publicly acknowledging the fact.

3. Is it not time to admit that rather than try to fix Windows, perhaps Microsoft should toss the old kluge out and start anew? Apple, a much smaller company, did it with OSX and came up with a rock-stable OS with stunning features. Rather than continue to invest more and more in fixing old code they’ve been kludging for a decade and a half, perhaps it’s time for Microsoft to start with a blank sheet of paper. The nauseating fact that Microsoft is now losing much of its critical forward momentum in its flagship software line because it’s plugging holes in old code is an embarrassment.

For years Microsoft has gotten away with this sort of thing because it has been able to meet deadlines. Now that is no longer the case. And it is high time for all of Microsoft’s shareholders to point vigorously to the very top of that enterprise and call to account the Last Sacred Cow:

Bill Gates.

It’s time he, as Chief Software Architect, answered for the horror that he has designed. The Beast has now turned on its maker. Either the maker must slay the beast, or be destroyed himself.